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First Business

News/Business. Angie Miles. (2013) New. (CC) (Stereo)




San Francisco, CA, USA

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Us 7, China 4, Airbus 4, Warren Buffett 3, Apple 3, Yellen 2, Janet Yellen 2, S&p 2, Superstorm Sandy 2, Merck 2, California 2, Greece 2, New York 2, Angie 1, Tim Cook 1, The N 1, Toyota 1, Judd Gregg 1, Matt Shapiro 1, Penney 1,
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  KICU    First Business    News/Business. Angie Miles.  
    (2013) New. (CC) (Stereo)  

    October 29, 2013
    4:00 - 4:31am PDT  

a hit and miss. apple fails to knock it out of the park in latest earnings report. in today's cover story-- phone lines light up as business groups lobby lawmakers on immigration legislation.. an update on residents of the jersey shore and more in the 1 year aftermath of superstorm sandy.. and words of wisdom on taking risks from buffett and son. first business starts now! you're watching first business: financial news, analysis, and today's investment ideas. good morning! it's tuesday, october 29th. i'm angela miles. in today's first look: a record rally to start the week. the dow fell a point, the nasdaq by
3, but the s&p-- just managed to make a record day when a gain of 2 points. gold and oil remained near the flatline. apple fails to impress wall street. after the close last night the tech giant reported earnings that topped analyst targets-- but profits from sales of iphones and ipads were not as robust as what analysts wanted. shares dropped about two dollars. retailer michael kors is set to join the s&p 500 friday night. shares rose $3 dollar after the close on the news. gas prices-- hit the lowest level of year year monday. according to triple a the average price of a gallon of regular unleaded was $3.28. brian battle of performance trust is with us on this tuesday morning. good morning to you. > >good morning. how are you? > >wonderfully well. we have a fed filled week this week. everybody will obsess about the fed. what do you anticipate? > >the fed's got a two day meeting. tomorrow they're gonna release results and we're hoping or the expectation is that it will be nothing.
remember there's 2 things. they're gonna say 1---what are they gonna do about short term rates? which the answer to that's gonna be nothing. and the second is will they taper? will they stop buying bonds? and the expectation for that is approximately zero. they probably can't stop buying bonds because the economic conditions are probably worse than they were last month. and we have a forecast too that they won't do anything again maybe until the beginning of next quarter---2014---because then ben bernanke is out of the job, janet yellen starts the job and then we have the holidays in between. so it would be really hard for the fed to taper if the economy's not better over year end and we have a new fed chair. so the expectation is we probably won't have any fed activity until the beginning of next year. > >good to know and that segues perfectly into the jobs number which is due out november 8th. are the bonds bracing? > >it's a funny thing. the last time we had the jobs number it was on a tuesday and it was 3 weeks late. now we have the unemployment number and it's a week late. but it's for a month
that was weird. we had the government shutdown so in september and october and a little of november we're gonna have economic numbers that have a lot of statistical noise because if it's good or it's bad---and they're probably gonna be bad---people will say it's because the government was closed that slowed the economy we're gonna have a number that's gonna come out, people will look at it, but they'll immediately discount it because it was from a period that was unusual from a historical perspective. > >brian, great to have you on the show with us this morning. thank you. > >you're welcome. apple's launch of it's iphone 5s, eight days before the end of the fiscal quarter gave a boost to sales---topping analyst estimates. but apple's forecast for the holidays left a slight chill in the room of christmas future. apple sold 33.8 million iphones--a 26% increase from last year. revenue was 37 and a half billion at the end of the quarter. that's up from 36- billion a year ago. but the biggest stars, according to some tech analysts, were the new operating systems. "this was the year in which they released ios7 and maverick, the macintosh operating system and they are not trivial updates. they really do show a real five year forward projection of where they want to go with both of these platforms." ipad sales were flat for the apple's fiscal fourth quarter. apple stock closed at five-29. more on apple--coming up. greek bonds turned into a great bet for bond-fund managers. according to analsys by morningstar-- 3 bond funds based in athens, greece--- are boasting returns of more than
100% during the past year. all three bought greek government bonds when the euro-zone debt crisis was at its very worst. it's also when most "other" investors were staying away or dumping thier investments in greece. efforts to pursuade house members to pass immigration reform are stepping up, this week. they include hundreds of business leaders who support reform headed to washington to lobby republicans and immigrant rights groups who've been working the phones since summer. this phone bank at the illinois coalition for immigranty and refugee rights is in full lobbying throttle...calling constituents in congressional districts who may in turn, crank up the heat on congress. "whether they do it piecemeal or comprehensively, we wll see what they do with the 11- million undocumented. it'sw important how they deal with that. " last summer, the senate passed comprehensive immigration reform. allowing more high-skilled and
low skilled workers into the u- s., a guest worker program with protections for farm workers and 13-year path-to-citizenship for the estimated 11-million people here illegally. but it stalled in the house. republican leaders there advocate their own scaled back version. this week, about 600- republican-leaning business and agriculture leaders who back immigration reform are zeroing in on 80-republicans in the house. "it's been so fractious for them. they've got to get something done. i'll tell you this much, they're not going to deport 11-million people. everyone agrees to that, even the most right-wing tea party." billy lawless came to the u-s from ireland 16-years ago, hired ten americans to work in his restaurant yet could not his own green card. legislation approved by the senate would change that. lawless now employs 130-people in his two restaurants. sunday, california congressman jeff denham became the first republican to co-sponsor immigration bill introduced by
democrats earlier this month. denham's district is more than 41% latino and located in california's agriculturally- rich central valley. furloughed federal workers who collected unemployment checks during the government shutdown will have to return the money. workers blocked from their jobs during the 16 day shutdown will receive back pay from their time away. 400,000 federal employees were furloughed. usa today reports only 70,000 applied for jobless benefits and a much smaller number actually received the government assistance. the senate's banking committee will reportedly hold a confirmation hearing for janet yellen in november. currently second-in-command at the federal reserve, yellen was nominated for the top post earlier this month. yellen is expected to be confirmed but several republicans oppose her ascension because she strongly supported stimulus efforts. given that opposition a quick vote may not happen. homes sales are showing signs of slipping. the national
association of realtors reports--its pending home sale index fell 5.6% in september. the chief economist for the n- a-r says it suggests homes sales will be lower in the 4th quarter. higher interest rates on mortgages, higher home prices and the government shutdown are blamed. one year ago, superstorm sandy unleashed deadly force across the northeast. it killed 117 people. and the storm's 68- billion dollars in damage is second only to hurricane katrina. the red cross received about 308-million dollars in donations. it has spent about 90-percent of that. now, it is providing about 60-million in grants to nonprofits helping with home repairs and other long-term recovery needs from new york to west virginia. "now, we've moved on to another phase of recovery. we'fre helping people with rental assistance access to case workers. we're also involved with helping people deal with mold remediation. for the next year or so, you'll see that's
what we're concentrated on." there is still a lot of work that remains. in new jersey, 26-thousand residents are still out of their homes. new york's metropolitan transit authority expects to pay several billion dollars to fully repair the subway system that may take until 20-16 to complete. consol energy-- famous for its coal business. stunned wall street this week. consol plans to sell 5 of its coal mines to focus on it's more lucrative natural gas business. the energy company is also slashing its dividend in half. consol will sell its 5 mines in appalachia to murray energy corp for $3.5 billion dollars. jc penney's continues to tell a rosey story about its future prospects. the beleagured retailer told investors for the third time in five weeks that sales are improving. the company is also forecasting upcoming positive comparable- store sales results. penney's has been struggling in the wake of failed experiments by former c-e-o ron johnson. shares were
up yesterday after these most recent comments by new chief myron ullman. target turns in earnings tomorrow. and, investors are said to be curious about the companys holiday sales plan. christmas is a critical time for almost all retailers. and both walmart and target have reduced profit expectations. target will attempt to step up its game this year by displaying prices on products during tv commericials, plus offer same day pick up for online orders. target shares are down roughly 5% since august. consumer reports pulls its recommendation of three toyota models after the vehicles turn in poor crash test results. the automaker's namesake camry is among the models as is the prius v and rav-4 s-u-v. toyota's camry was the third most sold car in the united states during the first nine months of 20-13. consumer reports says it does not recommend any vehicle that receives a "poor" grade in crash tests. within three years china will surpass the u-s as the world's largest business travel market. that according to the global
business travel association. the american business travel market has long been the world's busiest but thanks to china's booming economy that will soon change. within one year -- beijing's main airport will surpass atlanta's hartsfield as the world's busiest air hub. airbus calls on the airline industry to widen seats by an inch but boeing calls it a selfish marketing ploy. airbus cites a london sleep center study that says seats that are 18 inches wide equals a 53% improvement in passenger sleep quality on a long-haul flight. 18 inches also happens to be the standard issue airbus seat width. boeing-made airplane seats are 17 inches wide. the company called out airbus for what it calls a shameless attempt at self-promotion. merck is reporting sluggish sales as generic drugs cut into its business. a prime example is copy cat versions of its big selling allergy pill singulair. generics of that drug hurt merck's sales numbers. the company topped wall street's
profit expectations. but then lowered its forecast for the year. merck shares fell around 2% yesterday. some downright royal earnings for burger king. the chain saw a jump of 4.35% in the third quarter when compared to a year ago and posted a profit of $68.2 million. the boom can be attributed to cut backs in operating expenses and efforts to revive its menu offerings -- specifically, the recently introduced satisfires. the company hopes the lower fat and calorie count fries will draw customers. wine lovers and vineyard owners still to come: the son and grandson of billionaire
investor warren buffett will be here with tips on taking risks. plus -- how even the best looking stocks can turn out to be a losing venture. and, trader thoughts on why apple may falling out of favor with investors. it's all still to come on first business. ♪ ♪ ♪
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apple shares ramped up into
earnings.. here with a post earnings apple dissection is andrew keene-- president of keene on the good morning andrew. what do you expect from the trade today? what is your instinct telling you about apple shares? > >yesterday there actually wasn't as much movement as you would have expected. intitially when it came out the stock was trading 530. it got an initial pop to 542 and then it sold off. basically if you look at it, did they have good earnings? did they beat on the top and bottom line? they have been ratcheted down so much year after year. the thing that people are disappointed in is their profit margin which went down from 36---they were looking at like 36, 37 1/2% and analysts were expecting 39 1/2. sold back down all the way to 503 and then buyers came into the market so a very whipsaw day yesterday. i'm gonna keep an eye on it today. it has been moving nicely into the earnings so maybe this is just an initial pullback and people are gonna buy it. so it should be interesting to see what kind of action we get today. > >andrew, is apple losing it's product appeal under tim cook or gaining ground? > >yes, i've been talking about it on your show for a very long time. it's in a show me phase. and it really hasn't shown investors---basically if we didn't have the carl ichan news that he was buying a huge piece of apple, i think apple would be trading $450 right now. so they haven't shown investors what they want. they want to see what's going on with apple tv. we've been talking about it
this whole year. it's supposed to be out by the end of 2013 and we don't hear anything about it. we hear about a possible deal in china and we don't hear anything about it. so we have these products---when they came out with the new ipad and they refreshed it and made it thinner, faster. they can only do thinner and faster for so long. they're talking about this iwatch. we haven't heard anything about it. so every product that we hear about we haven't heard or seen so i think they're losing some of their touch in the field. even though the stock is actually holding up decent. we talked about it getting down to $380. it's back above 500 now. i think when products come out the stock can move higher but it's kind of risky holding on to it because it moves so much on a daily basis. > >-where will the stock be in a year or so-- care to predict? > >i think it will go higher. i would see it around the $620 level. if apple can hold on without coming out with any products then i think when it does come out with products they will be very good products and they will take them to the next level. so if i was a long- term holder, i like the story long term but on a day to day basis it gets whippy. but i think it will be around 625 in a year. > >will we see a buy back on the shares? > >i'm not concerned about the buyback so much. everybody's focusing on the buyback and what they're doing with their cash. jsut let them hoard their cash in my opinion. show me a great product. show me an apple tv that people want to buy. show me an iwatch that people want to buy. stop coming out with refreshing your line to thinner, faster, different colors. i don't want to see that as an investor. i want to see new
products. show me some innovation. you have google glasses. where's apple's innovation right now? right now, they're behind the times but i think they can catch up. they have a great team management. i think tim cook is a great leader and i think he will take apple higher in the long term. > >thank you for your thoughts today. much appreciated andrew. > >thank you. coming up...the son and grandson of warren buffett share a wealth of wisdom after the break.
you have the possibility of making the world a better place. that's according to a new book by billionaire warren buffett's son and grandson. the book is: forty chances: finding hope in a hungry world. we are so pleased to have howard g buffett and howard w buffett on set with us this morning. good morning. so what about the name of this book---forty chances? it's all about philanthropy here. > >it's about more than philanthropy actually because it's about how you take your forty chances, forty years that we kind of all have and do the best with it. so it involves everything from philanthropy to business to whatever you can do
as an individual to help. > >we only get forty chances? > >he keeps telling me he's gonna get sixty. if you think about it, when you get out of school and you get a little experience you really have about forty prime years to reach your goals, to build a legacy---whatever it is you really want to focus on. so it's trying to create a mindset and it's true, some people get a little more than forty chances but it's a number that we could make sense out of. > >what is the takeaway from this book? just give us a little nip. > >i think the takeaway is that as big as all the challenges are in the world today, if we're willing to take more risk and we're willing to be more innovative and we're willing to fail and admit our faliures then i think that will lead to more success and i think it's really important that we don't focus only on the easy things. > >care to talk about some of your failures? > >the list is quite long. > >but that's a good thing. > >absolutely. one of the number one things my father pushes through is that my grandfather has pushed down through the family line is that we have to take risks. we have
to be willing to fail to learn from those failures in order to adapt and take them with us to the next chance. > >how do you know when it's a good risk? because i think that fear holds a lot of people back from taking risks. > >i don't think you always know that it's a good risk. i think that it's always easier to be comfortable and stay where you're at and not worry about it. i think most of my life i had a mom and a dad that just encouraged me to go outside that comfort zone. you always learn more from going outside that comfort zone than you'll ever learn by stating in it. > >is it easier to take a risk when you have a lot of financial backing? > >it's easier from the standpoint that if something goes wrong you don't suffer as much but i think in our case the risk we're talking about is relative to the amount of money we have to invest in the future to try to change things. and i'm willing to take a big risk and big bet with that money because i think if you look at
all the intellect and financial resources that---for the purposes of the book---ending hunger we haven't been that successful. so we've really got to find different ways of doing it. > >exactly what are some of those ways? what would you do? how can we actually heal the hunger problem in this world? > >one of the big things we profile in forty chances is some of the people that are doing things differently. there are everyday heroes out there. it's easy to get caught up in the magnitude of the problem and overwhelmed with the problem but everytime that happens to me i meet somebody else and i see something that somebody's doing and it's really encouraging. > >i wan't to ask you---and i know you're always thinking of the next big thing---so please give me one idea of a risk area or an investing area you are currently focused on. > >i'm actually now in chance number 3 when it comes to farming. we have a family farm in nebraska that my father's allowed me to start participating in take some of the management role. that's been an eye opening experience, learning about agriculture hands on and understanding stewardship of the land and it's really been remarkable. > >we are actually building the largest infrastructure project
in eastern congo in the middle of conflict zone. we have to negotiate different rebel groups to be able to do it. we have to work with the government to do it. if we get it done it will bring electricity to 130,000 people and create a lot of jobs, and be a demobilization strategy. whether it works or not, we're gonna find out. > >much success to both of you and again the book is forty chances. great to chit-chat with the buffett's this morning. > >thank you very much. > >thank you. just ahead-- how even the best of traders can be fooled by a hot stock. chart talk is next.
matt shapiro, president of mws capital joins us now and he's here to talk to us about how investors get burned on hot stocks. good morning to you. > >good morning angie. > >you're watching nq mobile. at one time this was a gogo stock but what went wrong here? > >a lot of things. it shows you that people can get fooled in the stock market no matter what. as it turns out, chinese company, internet cloud services, high flyer. had the right pedigree, had the right looks. all of a sudden a hard hitting report from muddy waters basically alleging that the company has falsified everything. the stock drops in half. it's $9. what do you do? > >how can a person know? > >you really can't often times. look at what's happened in the past. enron, worldcom. even in this great public marketplace of ours, there will
always be a chance sometimes that even a company that seems completely legitimate---nq is listed on the new york stock exchange---can get through the cracks and actually be a fraud. > >let's give people some actionable tips here. so, what do you do? do you buy smaller shares? what would you do as a trader? you're a smart guy. > >i know the market's been doing great. a lot of people are in and out of hot stocks riding especially the small caps. my advice is to focus on the fundamentals. here we had some caution signs. a high flying stock, listed in china, very aggressive accounting potentially. you gotta be careful. > >matt, good to have you on the show this morning. thank you. > >you're welcome. we hope you will be back to join us tomorrow. senator judd gregg will be here to talk about how he intends to run the nation's largest lobbying trade association. find out if he has a plan to help main street prosper. from all of us at first business, have a great tremendous tuesday.
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